With the influx of private equity investment in the commercial satellite business, questions have lingered as to whether private equity owners will make the necessary capital expenditures to replenish satellite constellations as needed or whether they will cash out before the time to reinvest in replacement spacecraft comes around.

While the industry waits for that answer, a new spacecraft developed by Orbital Recovery Ltd. that could soften the financial impact on replacing in-orbit assets is sitting on the horizon. The company recently passed its baseline design review milestone for its ConeXpress Orbital Life Extension Vehicle (CX-OLEV), a spacecraft that will supply the propulsion, navigation and guidance to maintain telecommunications satellites in their proper orbital slot for up to eight additional years.

The baseline design review “was a development phase study undertaken by the European team of contractors on behalf of ourselves and the European Space Agency (ESA), whereby the ESA passes judgment on the technological feasibility of the whole project. We passed [with flying colors]” Orbital Recovery CFO Alex Polman told Satellite News.

With that milestone cleared, Orbital is now able to go out into the market to sell its services.

“We are in active negotiations with clients,” Polman said. “There is a lot of excitement around this. Life extension has been spoken about for a long time. We are now, it seems to be, the first company actively doing this and actively going out to the market and trying to establish this business.”

Life Extension With CX-OLEV

The CX-OLEV will be sent into orbit on an Ariane 5 rocket. Orbital Recovery has an exclusive launch services contract with Arianespace and has designed the CX-OLEV to fit into a portion of the Ariane rocket that otherwise would go unused.

“We have an exclusive license agreement with Arianespace to use what is now a standard payload adaptor,” Polman said. “One of the satellites sits on top of an adaptor, which is a conical shape. The space below that is empty. What we are doing is we are using the conical adaptor, which sits on every single launch. That is where we place our satellite for launch.”

Once in space, the CX-OLEV will be maneuvered to the target satellite for docking. The life extension spacecraft is designed to grasp a 3-axis-stabilized satellite through the apogee kick motor nozzle.

“We license exclusively from the German space agency, DLR, a docking tool that attaches itself to the satellite in such a manner that it is basically possible with the large majority of the satellites that are presently flying,” Polman said.

The life extension vehicle also can be undocked from its initial satellite and moved to another satellite.

Eye On Cost

Outside of the technical aspects of this project, the key determination on whether CX-OLEV will offer a viable alternative to replacing a satellite when its useful life runs out is cost. Since Orbital Recovery is in negotiations with prospective clients, Polman declined to discuss how much the anticipated cost of the CX-OLEV.

But Polman did offer a glimpse as to how the spacecraft will be paid for. As the company was conducting its market research on the project, it was initially presenting two different financing options: the normal satellite purchasing model, where the CX-OLEV would be paid for as manufacturing milestones are reached and the majority of costs are paid pre-launch; and a service level agreement, under which satellite operators would not start paying Orbital Recovery until the CX-OLEV was physically docked to the target satellite. Prospective clients, however, were looking for something else.

“What we are noticing in the market is that clients are interested in a hybrid” of the satellite purchasing model and the service agreement,” Polman said. Prospective clients also enquired about reselling unused life on the CX-OLEV, moving the rescue tug to another telecom satellite.

In terms of production time, Polman said the first CX-OLEV is expected to take up to 32 months to build, but the goal is to get the production time down to 24 months.

“We really need to come down to 24 months because that is the standard for satellite manufacturing at the moment,” Polman said, noting that he does not expect any significant hurdles to meeting the 24-month goal since more than 90 percent of the CX-OLEV’s components are used in satellties today.

Orbital Recovery hopes to announce its first customer in the near future and is targeting the fourth quarter of 2008 for the maiden voyage of the CX-OLEV.

–Gregory Twachtman